Last year, the UK government notified the EC about its decision to allow the broadcaster to use public money to finance four digital TV channels and five digital radio services.
However, commercial broadcasters such as BSkyB objected to the decision, claiming it was state aid and anti-competitive.
Yesterday, the EC said in a statement that the use of the licence fee money in this way "does not involve state aid because the BBC will be subject to public-service obligations and the state financing is not disproportionate to the net costs of running the services".
It added that it accepted that the BBC competes with other broadcasters and programme makers, and that state funding could give it an advantage over its European competitors and distort trade between member states.
The statement concluded: "In the present case, no real advantage has been granted to the BBC, as the compensation for the digital channels is not disproportionate to the net costs of the new channels, which are provided as part of the public-service obligation of the BBC."
The BBC has so far launched three new digital radio services: Sports Extra, Five Live and 6 Music, with a number still to launch. It has only launched three TV services -- BBC Four, CBBC Digital and CBeebies, out of the four it has proposed, with BBC Three, a youth entertainment channel still awaiting government approval.
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